The market is showing a remarkable pattern of ignoring bad news. Spanish bond yields continue to head north of 7% and the time bomb is ticking for a solution to the debt crisis.

The S&P 500 tested the 50-day average and the 50% retracement with a few more tiers of resistance at 1357 and at 1363, with little above that zone until a retest of the 52-week highs. While we do not see a return to the 52-week highs as likely, we could squeeze this market a bit higher.

Last summer, the final bounce before the fall in late July through early October, bounced to about 2% below the previous peak, which would put the current bounce potential a bit closer to 1395. ORCL pre-announced some good numbers and an increased buyback program, and we have to say the on-line video of the new MSFT tablet looks HOT! However, FDX guided a bit lower as they often do, which is not too surprising given the slowing global growth theme.

This could be just what the market needs to get a little excited ahead of earnings, especially if the FOMC extends the twist and the Troika continues the big $2T bazooka safety net talk.